Oil falls below US$28

Crude oil prices fell sharply for the second day in a row Tuesday. Benchmark US crude oil dropped US$1.75, or 5.6 per cent, to close at US$27.94 a barrel in New York.

Brent crude, a benchmark for international oils, fell US$2.56, or 7.8 per cent, to close at US$30.21 a barrel in London.

The International Energy Agency, which advises countries on energy policy, said oil prices will continue to come under pressure as supply is set to outpace demand this year.

Stock markets have endured a torrid start to the year as investors have fretted over a number of issues, including the fall in the price of oil to multiyear lows, a slowdown in China and whether many parts of the global economy will fall into recession and suffer a debilitating period of deflation, or falling prices.

Global equities have now lost about US$6 trillion since the start of the year. In January, that was largely due to worries over the slowdown in China and the slump in the price of oil.